Performance Improvement Plan (PIP) is not an “adverse employment action” for purposes of federal anti-discrimination laws.

In order to support a claim of employment discrimination, an individual typically must show that an “adverse employment action” was taken, and that such action was based upon a protected characteristic. To constitute an adverse employment action for purposes for federal anti-discrimination laws, such action must create a significant change in an employee’s status, and includes firing, failure to promote, reassignment with significantly changed job responsibilities, or a significant change in other employee benefits. In an unpublished opinion, the 3d U.S. Circuit Court of Appeals recently joined a number of other circuits to hold that an employee’s Performance Improvement Plan (PIP) is not an adverse employment action, absent some accompanying changes to pay, benefits, or employment status. Reynolds v. Dept. of the Army, 3d Cir., No. 10-3600, July 22, 2011.

In 2004, after working for the federal government for a number of years, Raymond Reynolds took an engineering position with the U.S. Army’s Communications-Electronics Research, Development, and Engineering Center, located in Fort Monmouth, NJ. Reynolds’ supervisor (Kornwebel) felt that he did not take his job seriously, that he improperly delegated responsibilities to others, and that he failed to comply with her directives. In response, Reynolds denied the allegations of poor performance, claiming that Kornwebel treated him “dismissively” and had not provided clear job objectives.

In August 2004, Kornwebel assessed Reynolds’ performance, and found that he had failed to meet certain job goals. On November 3, she met with Reynolds and presented a PIP that allowed 90 days within which to improve his performance or face the possibility of reassignment, demotion, or termination. The day after that meeting, Reynolds applied for two early retirement incentive programs. In the following month, he filed a charge of discrimination with the EEOC, alleging age discrimination.

In order to support his claim of age discrimination, Reynolds had to show that he was at least 40 years old (he was 51 at the time), that he suffered an adverse employment action, that he was qualified for his position, and that he was replaced by a person sufficiently younger to support an inference of discriminatory animus. The district court concluded that Reynolds could not show that he was the subject of an adverse employment action, and granted summary judgment in favor of the Army.

The Third Circuit agreed, citing prior decisions by the Seventh, Eighth, and Tenth Circuits in which a PIP was determined not to have been an adverse employment action. According to the Third Circuit, a PIP “differs significantly” from the types of actions typically viewed as adverse. In fact, far from changing the status of an employment position, a PIP usually conveys to the employee ways in which an individual can better perform the responsibilities that he or she already has. The Court pointed out that to allow a PIP to be viewed as an adverse action would simply create greater frustration for employers seeking to improve and employee’s performances by taking an action that, in effect, would insure a discrimination claim.

It is worth noting here at although this holding seems beneficial to employers, it comes with one caviat: the Court’s reference to sister courts specifically notes that these other court decisions have concluded that a PIP is not an adverse employment action absent accompanying changes to pay, benefits, or employment status. Therefore, an employer who imposes a PIP while at the same time downgrading the employee’s pay, responsibilities, or other benefits could find that its actions are viewed as “adverse,” thereby potentially supporting an employee’s claim for discrimination.